Schwieterman Update 10-5: Feeder cattle futures were sharply lower on Thursday
on October 5th, 2012 at 8:35 amCorn Estimated Fund Position
Trends
Short Term: Up Net Long Futures and Options: 214305
Long Term: Down Change: +3000
Overnight Trade: Z -1 @7:30 AM
Yesterday the corn failed to hold gains resulting in yet another nearly unchanged close. The December corn essentially hasn’t moved since last Friday’s limit higher day. Judging by the action this week and so far today there is little reason to expect anything different today. Look for two sided directionless trade with resistance at the weekly highs and support at the 9-day moving average.
Wheat Estimated Fund Position
Trends
Short Term: Down Net Long Futures and Options: -873
Long Term: Down Change: -1000
Overnight Trade: Chicago: Z -1 KC: Z -1 @7:30 AM
Like the corn, the wheat gave up its gains and is trading at the lower end of the trading range. As usual it would help if we saw better export demand figures instead of just talking about rising Russian wheat prices. It seems that the wheat is falling back into the role of the follower and in order for the wheat to post gains the corn will have to be higher as well. The December KW still looks like a buy at $8.75 and we may see a move to that level yet this week.
Soybeans Estimated Fund Position
Trends
Short Term: Down Net Long Futures and Options: 155581
Long Term: Down Change: +6000
Overnight Trade: X +3 @7:30 AM
The 9-day moving average has stopped the November soybeans several times recently and it did it again yesterday. Traders still fear a big increase in soybean production in next week’s report, which is keeping the bulls in check despite the huge export sales. The market should be able to make a recovery effort up to the $16.00 area before the report, but after that it will depend on the numbers and traders attitudes. I still think this break has been a blessing to the end users.
Live Cattle
Trend
Short Term: Down
Long Term: Down
Opening Calls: Mixed
Live cattle futures closed moderately lower on Thursday, rejecting early strength and higher cash news. Cash traded actively at $124-$124.50 in the south, which was a $1.00 better than week ago sales. Cutouts continue to firm and kills remain below week ago and year ago levels. Overnight activity has been narrowly mixed, with front months modestly higher and deferred softer. October is trading 2.00 below yesterday’s highs in the cash market. Northern trade remain unfinished, with asking prices of $193 or higher.
Feeder Cattle
Trends
Short Term: Down
Long Term: Up
Opening Call: Mixed
Feeder cattle futures were sharply lower on Thursday, as concerns over higher corn prices and negative technical trade weighed on the market. Overnight trade is mixed, with bull spreading a feature. Corn prices are modestly lower. We continue to see feeders overvalued in relation to the fat and corn market. We look to sell any rallies in the 2013 contracts, as they hold a substantial premium to cash.
Source: Schwieterman Marketing, LLC, www.upthelimit.com , 620-275-4133